What is internal audit?
The role of internal audit is to provide independent assurance that an organisation's risk management, governance and internal control processes are operating effectively.
Internal auditors deal with issues that are fundamentally important to the survival and prosperity of any organisation. Unlike external auditors, they look beyond financial risks and statements to consider wider issues such as the organisation's reputation, growth, its impact on the environment and the way it treats its employees.
In sum, internal auditors help organisations to succeed. We do this through a combination of assurance and consulting. The assurance part of our work involves telling managers and governors how well the systems and processes designed to keep the organisation on track are working. Then, we offer consulting help to improve those systems and processes where necessary.
Want to know more?
Read our guide What is internal auditing?
While sharing some characteristics, internal and external audit have very different objectives. These are explained in the table below:
|External audit||Internal audit|
|Reports to||shareholders or members who are outside the organisations governance structure.||The board and senior management who are within the organisations governance structure.|
|Objectives||Add credibility and reliability to financial reports from the organisation to its stakeholders by giving opinion on the report||Evaluate and improve the effectiveness of governance, risk management and control processes. This provides members of the boards and senior management with assurance that helps them fulfil their duties to the organisation and its stakeholders.|
|Coverage||Financial reports, financial reporting risks.||All categories of risk, their management, including reporting on them.|
|Responsibility for improvement||None, however there is a duty to report problems.||Improvement is fundamental to the purpose of internal auditing. But it is done by advising, coaching and facilitating in order to not undermine the responsibility of management.|
We have a professional duty to provide an unbiased and objective view. We must be independent from the operations we evaluate and report to the highest level in an organisation: senior managers and governors. Typically this is the board of directors or the board of trustees, the accounting officer or the audit committee.
The nature of internal auditing, its role within the organisation and the requirements for professional practice are contained within the International Professional Practices Framework (IPPF). The components and the detailed content of the IPPF are available in the Global professional guidance area of the website.
Internal auditors have to be independent people who are willing to stand up and be counted. Their employers value them because they provide an independent, objective and constructive view. To do this, they need a remarkably varied mix of skills and knowledge. They might be advising the project team running a difficult change programme one day, or investigating a complex overseas fraud the next.
From very early on in their careers, they talk to executives at the very top of the organisation about complex, strategic issues, which is one of the most challenging and rewarding parts of their role.
Fiona Warren - Internal Auditor, Leicestershire Partnership NHS Trust:
'It is a very sociable career and I get to meet new people on a daily basis, who work at all levels, right from Executive Directors to the Managers and frontline staff. It is also immensely rewarding to go back and follow up my work after a year or so and see how my efforts have not only resulted in quantative improvements, but also been accepted by the relevant people in charge.'
Find out more
Download our What is internal auditing? brochure
Standards and ethics for internal auditors